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Resistance See other Resistance Articles Title: The Global Economic Crisis: Central Banking at the Centre of Power The following is an excerpt of a chapter by Andrew Gavin Marshall from the new book by Global Research Publishers, "The Global Economic Crisis: The Great Depression of the XXI Century." Introduction To understand the historical context of the current crisis, it is pivotal to address the nature of the most vital and powerful force within the capitalist global political economy: the central banking system. One of the least understood, most widely ignored, and mysteries of capitalism, the central banking system, is also the source of the greatest wealth and power, essentially managing capitalism – controlling the credit and debt of both government and industry. Any notion of a "free market" must be dispelled in its true meaning, for as long as the central banking system has been dominant, central bankers have managed and controlled capitalism for the benefit of the few and at the expense of the many. Comprehending the nature of central banking is necessary in order to understand the nature of the current economic crisis. The Origins of Central Banking Central banking has its origins in the development of bank-issued money, which falls under three categories: (1) Deposit money subject to written check or oral transfer; (2) Bank-issued paper money (bank notes); and (3) Bank-issued legal tender paper money. In 1609, the Bank of Amsterdam was founded "as a bank of deposit slipping secretly into the practice of monetary issue towards the middle of the 17th century." At the same time, "the goldsmiths of England are generally supposed to have introduced both deposit money and the earliest English unofficial bank note." And importantly, "In Sweden we find what are widely regarded as the first true bank notes in Europe being issued in 1661 by a private bank founded by Johan Palmstruch."[1] As early as 1656, "the Bank of Amsterdam violated the one-hundred per cent reserve principle and, thus, created money," while "the goldsmiths in England became active as lenders in 1640." Further, the State Bank of Sweden "was founded November 30, 1656, and to Palmstruch, its founder, is attributed the first use of bank bills as credit money, not fully covered by the coin reserve."[2] As economist John Kenneth Galbraith explained in Money, "The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent. The deposits of the Bank of Amsterdam just mentioned were, according to the instruction of the owner, subject to transfer to others in settlement of accounts," and thus "the coin on deposit served less as money by being in a bank and being subject to transfer by the stroke of a primitive pen." Further, "another stroke of the pen would give a borrower from the bank, as distinct from a creditor of the original depositor, a loan from the original and idle deposit." Galbraith elaborated: The original deposit still stood to the credit of the original depositor. But there was now also a new deposit from the proceeds of the loan. Both deposits could be used to make payments, be used as money. Money had thus been created. The discovery that banks could so create money came very early in the development of banking. There was that interest to be earned.[3] Expanding on this notion of money-creation, economist Rupert J. Ederer explained, in regards to the Bank of Amsterdam, that both the depositor "and a borrower could affect a purchase with the same money at the same time, [thus] we had here some increase in the quantity of money." However, "the more serious infractions followed when the Bank began to lend money to the government of Amsterdam and eventually succumbed to the temptations offered by the [Dutch] East India Company." As Ederer articulated, "What this bank did surreptitiously was soon to be institutionalized and to form the essence of a new monetary technique." Thus, this bank established a "new monetary era": A marvelous new power probably equal to the potentialities of the discovery of coinage had evolved. The Bank had created money literally for over a hundred years without being discovered. Even after it was discovered, the Bank could have continued in operation in this new way except for public prejudice. The public was not yet ready to accept a money with no guarantee save the word of public authorities. It had been too seriously and too frequently misled in the past, and, paradoxically enough, it had fled to the banks for a more efficient money. Out of this flight grew the private money creation which is the essence of modern commercial banking.[4] The Bank of England As John Kenneth Galbraith explained in regards to the Bank of England, "Of all institutions concerned with economics none has for so long enjoyed such prestige," as "most of the art as well as much of the mystery associated with the management of money originated there. The pride of other central banks has been either in their faithful imitation of the Bank of England or in the small variations from its method."[5] As economist Rupert J. Ederer explained, it was with the founding of the Bank of England "which constituted the first complete official approval of money issue by private interests. In other words, private money-issue became a socially and legally sanctioned institution during the 17th century."[6] Ederer analyzed the history leading up to the creation of the Bank of England in his book, Evolution of Money. He explained that the slippage of the process of money creation from public to private hands "was but another manifestation of the intense struggle of king vs. parliament going on there at the time." Ederer elaborated: It had been customary in 17th century England for the wealthy classes to deposit their surplus metallic money in the London Tower for safe-keeping. Here, they felt confident, it was safe. This confidence was dealt a rude blow when King Charles I in need of money to conduct a civil war which he had precipitated with Scotland confiscated the hoards. As it was, Charles refused to release these funds until the merchants agreed to make him a loan. He did not repay the loan except after a long delay marked by sharp and bitter protests. The depositors had learned their lesson and would look for another safe-deposit bank. Most suited to the task, it seemed, were the vaults of the goldsmiths.[7] The goldsmiths, being savvy businessmen, "served notice to their depositors that they would accept money on deposit only on the condition that they could lend it out." The goldsmiths developed a cunning method of managing the money, as the smith would issue a "warehouse receipt" to depositors wishing to withdraw money, which was "a document showing that a certain quantity of metallic money was left on deposit by ‘X’ and could be claimed by him upon presentation of the receipt." Ederer explained: These receipts were at first scrupulously honored thus establishing confidence that the money would always be available. As a result, the clientele whose original intention was to get away from using the sensitive and impractical coins, simply began circulating the receipts.[8] The main obstacle to this development of money-creation was the state, as "Kings had insisted on the sole right to issue the monetary media ever since coinage began. Surrender of that right was fraught with dangers for the public welfare and for the very existence of the states involved." So the question was, as Ederer postulated, "How could these monarchs be induced to surrender or, at least, to share this power with private interests? The answer lay in the financially exposed position in which many monarchs found themselves during the 17th and 18th centuries because of constant wars and uprisings. They needed money desperately."[9] In England, King Charles II "borrowed what money the smiths were able and willing to lend at 12 percent. The repayment was to come in the form of taxes which were to be paid directly to the goldsmiths." However, businessmen and other powerful interests did not want a return to coinage, having grown accustomed to the use of receipts, which had allowed their businesses to flourish. Naturally, there was a growing desire for banks to emerge, following on the heels of the example in Amsterdam. However, all that was needed "was a king who was especially in need of funds for some royal venture. When this monarch appeared, certain alert interests would be able to foist upon the public a system of private money issue."[10] This opportunity emerged with King William and Queen Mary following the long war with Louis XIV, at a time in which the mercantile interests "had money that they were willing to lend on their own terms, and they were also aware of how lucrative banking in the new style could be, that is, when it involved the right to create money."[11] William was born a Dutch prince, whose mother was sister to King Charles II of England. He came to power in England in 1689 following the Glorious Revolution, in which King James II was forced to flee, which involved an invading Dutch army and resulted in the establishment of a constitutional monarchy and the English Bill of Rights, marking an end to the absolute monarchist era and the beginning of an era in which power was shared between monarch and the parliament. Now, the monarch, desperate for funds, had to look to private interests, and the answer came from a Scotsman named William Patterson: Speaking for the wealthy London businessmen he offered to lend money amounting to 1,200,000 pounds at 8% interest, provided that the lenders be granted a charter to establish a bank of issue. On their behalf he demanded the right to issue notes in an amount equal roughly to the amount of the debt, which would circulate as money.[12] These notes "would go out as loans to worthy private borrowers. Interest would be earned both on these loans and on the loans to the government. Again the wonder of banking."[13] The plan initially being put through Parliament in 1691 met opposition from the King and goldsmiths. However, it was eventually passed in 1694, and thus, the Bank of England was created.[14] In 1833, Parliament passed legislation that made the Bank of England have the only legal notes of tender, granting it a partial monopoly, as other banks still had notes in circulation. With the Bank Act of 1844, "the issues of all the other banks were limited to the amounts in circulation at that time." Confidence grew in the bank, acting as the government’s banker and agent, "and when the widespread establishment of joint-stock banks in England began in 1826, the Bank of England had already come to be regarded as the custodian of the cash reserves of the private banks, and thus of the country’s gold reserves." Eventually, the bank entered into the role of being the "lender of last resort" and had the responsibility to "maintain not only the currency but also the credit system of the country."[15] The Bank of France In 1788, the French Monarchy was bankrupt, and as tensions grew between the increasingly desperate people of France and the aristocratic and particularly monarchic establishment, European bankers decided to pre-empt and co-opt the revolution. In 1788, prominent French bankers refused "to extend necessary short-term credit to the government,"[16] and they arranged to have shipments of grain and food to Paris "delayed" which triggered the hunger riots of the Parisians.[17] This sparked the Revolution, in which a new ruling class emerged, driven by violent oppression and political and actual terrorism. However, its violence grew, and with that, so too did discontentment with the Revolutionary Regime, and its stability and sustainability was in question. Thus, the bankers threw their weight behind a general in the Revolutionary Army named Napoleon, whom they entrusted to restore order. Napoleon then gave the bankers his support, and in 1800, created the Bank of France, the privately owned central bank of France, and gave the bankers authority over the Bank. The bankers owned its shares, and even Napoleon himself bought shares in the bank.[18] In 1803, Napoleon granted the Bank of France the exclusive right of issue, abolishing competition, "and so the Bank of France assumed the role of the central bank." However, "the Bank’s independence was scarcely altered. At the time when it assumed the role as the country’s central bank, representatives of the 200 principal shareholders were still free to make policy themselves."[19] The bankers thus sought to control commerce and government and restore order to their newly acquired and privately owned and operated empire. However, Napoleon continued with his war policies beyond the patience of the bankers, which had a negative impact upon commercial activities,[20] and Napoleon himself was interfering in the operations of the Bank of France and even declared that the Bank "belongs more to the Emperor than to the shareholders."[21] With that, the bankers again shifted their influence, and remained through regime change, while Napoleon did not.[22] The Rothschilds ascended to the throne of international banking with the Battle of Waterloo. After having established banking houses in London, Paris, Frankfurt, Vienna and Naples, they profited off all sides in the Napoleonic wars.[23] The British patriarch, Nathan Rothschild, was known for being the first with news in London, ahead of even the monarchy and the Parliament, and so everyone watched his moves on the stock exchange during the Battle of Waterloo. Following the battle, Nathan got the news that the British won over 24 hours before the government itself had news, and he quietly went into the London Stock Exchange and sold everything he had, implying to those watching that the British lost. A panic selling ensued, in which everyone sold stock, stock prices crumbled, and the market crashed. What resulted was that Rothschild then bought up the near-entire British stock market for pennies on the dollar, as when news arrived of the British victory at Waterloo, Rothschild’s newly acquired stocks soared in value, as did his fortune, and his rise as the pre-eminent economic figure in Britain.[24] As Georgetown University History professor, Carroll Quigley wrote in his monumental Tragedy and Hope, "the merchant bankers of London had already at hand in 1810-1850 the Stock Exchange, the Bank of England, and the London money market," and that: In time they brought into their financial network the provincial banking centers, organized as commercial banks and savings banks, as well as insurance companies, to form all of these into a single financial system on an international scale which manipulated the quantity and flow of money so that they were able to influence, if not control, governments on one side and industries on the other.[25] Creating a Central Bank of the United States: The Federal Reserve The history of the United States from its founding through the 19th century to the early 20th century was marked by a continual political battle revolving around the creation of a central bank of the United States. Mercantilists such as Alexander Hamilton, who was the first Treasury Secretary, were in favor of such a bank, and his advice won over George Washington, much to the dismay of Thomas Jefferson, who was a strong opponent to central banking. However, "[Alexander] Hamilton, believing that government must ally itself with the richest elements of society to make itself strong, proposed to Congress a series of laws, which it enacted, expressing this philosophy," and that, "A Bank of the United States was set up as a partnership between the government and certain banking interests,"[26] which lasted until the charter expired in 1811. Again, during the tenure of Andrew Jackson (1829-1837), the primary political struggle was with the entrenched financial interests both domestic and from abroad (namely Western Europe), on the issue of creating a central bank of the U.S. Andrew Jackson stood in firm opposition to such a bank, saying that, "the bank threatened the emerging order, hoarding too much economic power in too few hands," and referred to it as "The Monster."[27] Congress passed the bill allowing for the creation of a Second Bank of the United States, however Andrew Jackson vetoed the bill, much to the dismay of the banking interests. It was in the latter half of the 1800s that "European financiers were in favor of an American Civil War that would return the United States to its colonial status, they admitted privately that they were not necessarily interested in preserving slavery," as it had become unprofitable.[28] The Civil War was not based upon the liberation of slaves, it was, as Howard Zinn described it, a clash "of elites," with the northern elite wanting "economic expansion – free land, free labor, a free market, a high protective tariff for manufacturers, [and] a bank of the United States. [Whereas] the slave interests opposed all that."[29] The Civil War, which lasted from 1861 until 1865, resulted in hundreds of thousands of deaths, during which, "Congress also set up a national bank, putting the government into partnership with the banking interests, guaranteeing their profits."[30] As Lincoln himself stated: The money powers prey on the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes. I have two great enemies, the Southern Army in front of me, and the bankers in the rear. Of the two, the one at my rear is my greatest foe. As a most undesirable consequence of the war, corporations have been enthroned, and an era of corruption in high places will follow. The money power will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed.[31] Throughout much of the 1800s and into the 1900s, the United States suffered several economic crises, one of the most significant of which was the Great Depression of 1873. As Howard Zinn explained: The crisis was built into a system which was chaotic in its nature, in which only the very rich were secure. It was a system of periodic crises – 1837, 1857, 1873 (and later: 1893, 1907, 1919, 1929) – that wiped out small businesses and brought cold, hunger, and death to working people while the fortunes of the Astors, Vanderbilts, Rockefellers, Morgans, kept growing through war and peace, crisis and recovery. During the 1873 crisis, Carnegie was capturing the steel market, Rockefeller was wiping out his competitors in oil.[32] Massive industrial consolidation by a few oligarchic elites was the rule of the day, as J.P. Morgan expanded total control over railroad and banking interests, and John D. Rockefeller took control of the oil market, and expanded into banking. Zinn explained: The imperial leader of the new oligarchy was the House of Morgan. In its operations it was ably assisted by the First National Bank of New York (directed by George F. Baker) and the National City Bank of New York (presided over by James Stillman, agent of the Rockefeller interests). Among them, these three men and their financial associates occupied 341 directorships in 112 corporations. The total resources of these corporations in 1912 was $22,245,000,000, more than the assessed value of all property in the twenty-two states and territories west of the Mississippi River.[33] In the early 20th century, European and American banking interests achieved what they had desired for over a century within America, the creation of a privately owned central bank. It was created through collaboration of American and European bankers, primarily the Morgans, Rockefellers, Kuhn, Loebs and Warburgs.[34] After the 1907 banking panic in the U.S., instigated by J.P. Morgan, pressure was placed upon the American political establishment to create a "stable" banking system. In 1910, a secret meeting of financiers was held on Jekyll Island, where they planned for the "creation of a National Reserve Association with fifteen major regions, controlled by a board of commercial bankers but empowered by the federal government to act like a central bank – creating money and lending reserves to private banks."[35] It was largely Paul M. Warburg, a Wall Street investment banker, who "had come up with a design for a single central bank [in 1910]. He called it the United Reserve Bank. From this and his later service on the first Federal Reserve Board, Warburg has, with some justice, been called the father of the System."[36] Senator Nelson W. Aldrich, "in the early years of the century, was by common calculation the most influential man in the Senate." He "had an unabashed commitment to high tariffs, sound money, [and] the untrammeled operations of big bankers and to all other measures which would, with reasonable certainty, enhance the wealth or power of the already rich, a community that very definitely included Aldrich himself." Further, his daughter married John D. Rockefeller, Jr.[37] In 1912, Aldrich "introduced legislation to establish a National Reserve Association along with fifteen regional associations. These would hold the reserves – the deposits – of the participating banks. To them the banks would turn for loans, including rescue in a time of emergency. All would be solidly under the control of the bankers whom they comprised." Although, when the System was finally created, "the ultimate legislation was the work not of Aldrich and his fellow Republicans but of the Democrats."[38] President Woodrow Wilson followed the plan almost exactly as outlined by the Wall Street financiers, and added to it the creation of a Federal Reserve Board in Washington, which the President would appoint.[39] It was two days before Christmas in 1913 that "Woodrow Wilson signed the Federal Reserve Act into law. It provided not for a central bank but for as many as twelve – the number later chosen. Washington guidance was to be by a Federal Reserve Board of seven, of which the Secretary of the Treasury and the Comptroller of the Currency were to be ex officio members. The powers of the board were slight. The regional idea had, in fact, triumphed, and the real authority lay with the twelve banks."[40] The regional banks: ...were each to be governed by a board of nine directors, six of whom were to be selected by the participating or member banks, although only three of these could be bankers. The remaining three were to be appointed by Washington.[41] The Federal Reserve, or Fed, "raised its own revenue, drafted its own operating budget and submitted neither to Congress," while "the seven governors shared power with the presidents of the twelve Reserve Banks, each serving the private banks in its region," and "the commercial banks held stock shares in each of the twelve Federal Reserve Banks."[42] Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
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Each of the authors in this timely collection digs beneath the gilded surface to reveal a complex web of deceit and media distortion which serves to conceal the workings of the global economic system and its devastating impacts on people's lives. The complex causes as well as the devastating consequences of the economic crisis are carefully scrutinized with contributions from Ellen Brown, Tom Burghardt, Michel Chossudovsky, Richard C. Cook, Shamus Cooke, John Bellamy Foster, Michael Hudson, Tanya Cariina Hsu, Fred Magdoff, Andrew Gavin Marshall, James Petras, Peter Phillips, Peter Dale Scott, Bill Van Auken, Claudia von Werlhof and Mike Whitney. Despite the diversity of viewpoints and perspectives presented within this volume, all of the contributors ultimately come to the same conclusion: humanity is at the crossroads of the most serious economic and social crisis in modern history. Montreal, Global Research Publishers. Centre for Research on Globalization (CRG), 2010. ISBN 978-0-9737147-3-9 (416 pages) We are not dealing with a narrowly defined economic crisis or recession. The global financial architecture sustains strategic and national security objectives. In turn, the U.S.-NATO military agenda serves to endorse a powerful business elite which relentlessly overshadows and undermines the functions of civilian government. This book takes the reader through the corridors of the Federal Reserve and the Council on Foreign Relations, behind closed doors at the Bank for International Settlements, into the plush corporate boardrooms on Wall Street where far-reaching financial transactions are routinely undertaken from computer terminals linked up to major stock markets, at the touch of a mouse button. Each of the authors in this collection digs beneath the gilded surface to reveal a complex web of deceit and media distortion which serves to conceal the workings of the global economic system and its devastating impacts on people’s lives. Our analysis focuses on the role of powerful economic and political actors in an environment wrought by corruption, financial manipulation and fraud. Despite the diversity of viewpoints and perspectives presented within this volume, all of the contributors ultimately come to the same conclusion: humanity is at the crossroads of the most serious economic and social crisis in modern history. The meltdown of financial markets in 2008-2009 was the result of institutionalized fraud and financial manipulation. The "bank bailouts" were implemented on the instructions of Wall Street, leading to the largest transfer of money wealth in recorded history, while simultaneously creating an insurmountable public debt. With the worldwide deterioration of living standards and plummeting consumer spending, the entire structure of international commodity trade is potentially in jeopardy. The payments system of money transactions is in disarray. Following the collapse of employment, the payment of wages is disrupted, which in turn triggers a downfall in expenditures on necessary consumer goods and services. This dramatic plunge in purchasing power backfires on the productive system, resulting in a string of layoffs, plant closures and bankruptcies. Exacerbated by the freeze on credit, the decline in consumer demand contributes to the demobilization of human and material resources. This process of economic decline is cumulative. All categories of the labor force are affected. Payments of wages are no longer implemented, credit is disrupted and capital investments are at a standstill. Meanwhile, in Western countries, the "social safety net" inherited from the welfare state, which protects the unemployed during an economic downturn, is also in jeopardy. The Myth of Economic Recovery The existence of a "Great Depression" on the scale of the 1930s, while often acknowledged, is overshadowed by an unbending consensus: "The economy is on the road to recovery". While there is talk of an economic renewal, Wall Street commentators have persistently and intentionally overlooked the fact that the financial meltdown is not simply composed of one bubble – the housing real estate bubble – which has already burst. In fact, the crisis has many bubbles, all of which dwarf the housing bubble burst of 2008. Although there is no fundamental disagreement among mainstream analysts on the occurrence of an economic recovery, there is heated debate as to when it will occur, whether in the next quarter, or in the third quarter of next year, etc. Already in early 2010, the "recovery" of the U.S. economy had been predicted and confirmed through a carefully worded barrage of media disinformation. Meanwhile, the social plight of increased unemployment in America has been scrupulously camouflaged. Economists view bankruptcy as a microeconomic phenomenon. The media reports on bankruptcies, while revealing local-level realities affecting one or more factories, fail to provide an overall picture of what is happening at the national and international levels. When all these simultaneous plant closures in towns and cities across the land are added together, a very different picture emerges: entire sectors of a national economy are closing down. Public opinion continues to be misled as to the causes and consequences of the economic crisis, not to mention the policy solutions. People are led to believe that the economy has a logic of its own which depends on the free interplay of market forces, and that powerful financial actors, who pull the strings in the corporate boardrooms, could not, under any circumstances, have willfully influenced the course of economic events. The relentless and fraudulent appropriation of wealth is upheld as an integral part of "the American dream", as a means to spreading the benefits of economic growth. As conveyed by Michael Hudson, the myth becomes entrenched that "without wealth at the top, there would be nothing to trickle down." Such flawed logic of the business cycle overshadows an understanding of the structural and historical origins of the global economic crisis. Financial Fraud Media disinformation largely serves the interests of a handful of global banks and institutional speculators which use their command over financial and commodity markets to amass vast amounts of money wealth. The corridors of the state are controlled by the corporate establishment including the speculators. Meanwhile, the "bank bailouts", presented to the public as a requisite for economic recovery, have facilitated and legitimized a further process of appropriation of wealth. Vast amounts of money wealth are acquired through market manipulation. Often referred to as "deregulation", the financial apparatus has developed sophisticated instruments of outright manipulation and deceit. With inside information and foreknowledge, major financial actors, using the instruments of speculative trade, have the ability to fiddle and rig market movements to their advantage, precipitate the collapse of a competitor and wreck havoc in the economies of developing countries. These tools of manipulation have become an integral part of the financial architecture; they are embedded in the system. The Failure of Mainstream Economics The economics profession, particularly in the universities, rarely addresses the actual "real world" functioning of markets. Theoretical constructs centered on mathematical models serve to represent an abstract, fictional world in which individuals are equal. There is no theoretical distinction between workers, consumers or corporations, all of which are referred to as "individual traders". No single individual has the power or ability to influence the market, nor can there be any conflict between workers and capitalists within this abstract world. By failing to examine the interplay of powerful economic actors in the "real life" economy, the processes of market rigging, financial manipulation and fraud are overlooked. The concentration and centralization of economic decision-making, the role of the financial elites, the economic thinks tanks, the corporate boardrooms: none of these issues are examined in the universities’ economics programs. The theoretical construct is dysfunctional; it cannot be used to provide an understanding of the economic crisis. Economic science is an ideological construct which serves to camouflage and justify the New World Order. A set of dogmatic postulates serves to uphold free market capitalism by denying the existence of social inequality and the profit-driven nature of the system is denied. The role of powerful economic actors and how these actors are able to influence the workings of financial and commodity markets is not a matter of concern for the discipline’s theoreticians. The powers of market manipulation which serve to appropriate vast amounts of money wealth are rarely addressed. And when they are acknowledged, they are considered to belong to the realm of sociology or political science. This means that the policy and institutional framework behind this global economic system, which has been shaped in the course of the last thirty years, is rarely analyzed by mainstream economists. It follows that economics as a discipline, with some exceptions, has not provided the analysis required to comprehend the economic crisis. In fact, its main free market postulates deny the existence of a crisis. The focus of neoclassical economics is on equilibrium, disequilibrium and "market correction" or "adjustment" through the market mechanism, as a means to putting the economy back "onto the path of self-sustained growth". Poverty and Social Inequality The global political economy is a system that enriches the very few at the expense of the vast majority. The global economic crisis has contributed to widening social inequalities both within and between countries. Under global capitalism, mounting poverty is not the result of a scarcity or a lack of human and material resources. Quite the opposite holds true: the economic depression is marked by a process of disengagement of human resources and physical capital. People’s lives are destroyed. The economic crisis is deep-seated. The structures of social inequality have, quite deliberately, been reinforced, leading not only to a generalized process of impoverishment but also to the demise of the middle and upper middle income groups. Middle class consumerism, on which this unruly model of capitalist development is based, is also threatened. Bankruptcies have hit several of the most vibrant sectors of the consumer economy. The middle classes in the West have, for several decades, been subjected to the erosion of their material wealth. While the middle class exists in theory, it is a class built and sustained by household debt. The wealthy rather than the middle class are rapidly becoming the consuming class, leading to the relentless growth of the luxury goods economy. Moreover, with the drying up of the middle class markets for manufactured goods, a central and decisive shift in the structure of economic growth has occurred. With the demise of the civilian economy, the development of America’s war economy, supported by a whopping near-trillion dollar defense budget, has reached new heights. As stock markets tumble and the recession unfolds, the advanced weapons industries, the military and national security contractors and the up-and-coming mercenary companies (among others) have experienced a thriving and booming growth of their various activities. War and the Economic Crisis War is inextricably linked to the impoverishment of people at home and around the world. Militarization and the economic crisis are intimately related. The provision of essential goods and services to meet basic human needs has been replaced by a profit-driven "killing machine" in support of America’s "Global War on Terror". The poor are made to fight the poor. Yet war enriches the upper class, which controls industry, the military, oil and banking. In a war economy, death is good for business, poverty is good for society, and power is good for politics. Western nations, particularly the United States, spend hundreds of billions of dollars a year to murder innocent people in far-away impoverished nations, while the people at home suffer the disparities of poverty, class, gender and racial divides. An outright "economic war" resulting in unemployment, poverty and disease is carried out through the free market. People’s lives are in a freefall and their purchasing power is destroyed. In a very real sense, the last twenty years of global "free market" economy have resulted, through poverty and social destitution, in the lives of millions of people. Rather than addressing an impending social catastrophe, Western governments, which serve the interests of the economic elites, have installed a "Big Brother" police state, with a mandate to confront and repress all forms of opposition and social dissent. The economic and social crisis has by no means reached its climax and entire countries, including Greece and Iceland, are at risk. One need only look at the escalation of the Middle East Central Asian war and the U.S.-NATO threats to China, Russia and Iran to witness how war and the economy are intimately related. Our Analysis in this Book The contributors to this book reveal the intricacies of global banking and its insidious relationship to the military industrial complex and the oil conglomerates. The book presents an inter- disciplinary and multi-faceted approach, while also conveying an understanding of the historical and institutional dimensions. The complex relations of the economic crisis to war, empire and worldwide poverty are highlighted. This crisis has a truly global reach and repercussions that reverberate throughout all nations, across all societies. In Part I, the overall causes of the global economic crisis as well as the failures of mainstream economics are laid out. Michel Chossudovsky focuses on the history of financial deregulation and speculation. Tanya Cariina Hsu analyzes the role of the American Empire and its relationship to the economic crisis. John Bellamy Foster and Fred Magdoff undertake a comprehensive review of the political economy of the crisis, explaining the central role of monetary policy. James Petras and Claudia von Werlhof provide a detailed review and critique of neoliberalism, focusing on the economic, political and social repercussions of the "free market" reforms. Shamus Cooke examines the central role of debt, both public and private. Part II, which includes chapters by Michel Chossudovsky and Peter Phillips, analyzes the rising tide of poverty and social inequality resulting from the Great Depression. With contributions by Michel Chossudovsky, Peter Dale Scott, Michael Hudson, Bill Van Auken, Tom Burghardt and Andrew Gavin Marshall, Part III examines the relationship between the economic crisis, National Security, the U.S.-NATO led war and world government. In this context, as conveyed by Peter Dale Scott, the economic crisis creates social conditions which favor the instatement of martial law. The focus in Part IV is on the global monetary system, its evolution and its changing role. Andrew Gavin Marshall examines the history of central banking as well as various initiatives to create regional and global currency systems. Ellen Brown focuses on the creation of a global central bank and global currency through the Bank for International Settlements (BIS). Richard C. Cook examines the debt-based monetary system as a system of control and provides a framework for democratizing the monetary system. Part V focuses on the working of the Shadow Banking System, which triggered the 2008 meltdown of financial markets. The chapters by Mike Whitney and Ellen Brown describe in detail how Wall Street’s Ponzi scheme was used to manipulate the market and transfer billions of dollars into the pockets of the banksters. We are indebted to the authors for their carefully documented research, incisive analysis, and, foremost, for their unbending commitment to the truth: Tom Burghardt, Ellen Brown, Richard C. Cook, Shamus Cooke, John Bellamy Foster, Michael Hudson, Tanya Cariina Hsu, Fred Magdoff, James Petras, Peter Phillips, Peter Dale Scott, Mike Whitney, Bill Van Auken and Claudia von Werlhof, have provided, with utmost clarity, an understanding of the diverse and complex economic, social and political processes which are affecting the lives of millions of people around the world. We owe a debt of gratitude to Maja Romano of Global Research Publishers, who relentlessly oversaw and coordinated the editing and production of this book, including the creative front page concept. We wish to thank Andréa Joseph for the careful typesetting of the manuscript and front page graphics. We also extend our thanks and appreciation to Isabelle Goulet, Julie Lévesque and Drew McKevitt for their support in the revision and copyediting of the manuscript. U.S. Constitution - Article IV, Section 4: NO BORDERS + NO LAWS = NO COUNTRY
Throughout much of the 1800s and into the 1900s, the United States suffered several economic crises, one of the most significant of which was the Great Depression of 1873. As Howard Zinn explained: The crisis was built into a system which was chaotic in its nature, in which only the very rich were secure. It was a system of periodic crises – 1837, 1857, 1873 (and later: 1893, 1907, 1919, 1929) – that wiped out small businesses and brought cold, hunger, and death to working people while the fortunes of the Astors, Vanderbilts, Rockefellers, Morgans, kept growing through war and peace, crisis and recovery. During the 1873 crisis, Carnegie was capturing the steel market, Rockefeller was wiping out his competitors in oil.[32] ============================================== These programmed depressions, wars, government upheavals, and population cleansings run in cycles. Stalin did it. Lenin did it. Mao did it. Britain and America did it. Europe did it. The only exception has been Mexico and South America. Mexico currently, of course, is feeding off the carcass of what once was the United States. Africa's ceaseless civil wars need no intervention. Hitler promised that if he won WWII, he would cleanse the masses every twenty-five years. Wash, Rinse, Repeat ..
U.S. Constitution - Article IV, Section 4: NO BORDERS + NO LAWS = NO COUNTRY
The History Of The House Of Rothschild By Andrew Hitchcock
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The relationship between morality and liberty is a directly proportional one. "Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." - Ben Franklin
thanks ..
U.S. Constitution - Article IV, Section 4: NO BORDERS + NO LAWS = NO COUNTRY
Lending money you don't have, but collecting "interest" on the same appears to be the most efficient form of theft ever invented by the minds of men.
In effect, it’s (The Holacaust Inc.) become like a grotesque doll wielded by witch doctors, used to keep individuals from asking too many questions, from thinking for themselves and stepping out of line.
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